WD Returns to the No. 1 Position on the Market of Hard Disk Drives

Western Digital Corp. on Wednesday reported financial results for the fiscal year 2012 and Q4 of FY2012 (~Q2 calendar 2012). While the company did not ship as many hard disk drives as it did last year, it did earn record revenues and profits thanks to major increases of hard disk drive pricing in the year due to flooding in Thailand. In the Q2 2012 WD returned its position as the world's No. 1 maker of hard drives, outpacing Seagate on unit basis.

“Fiscal 2012 was one of the most challenging and exciting years in our 42-year history. While responding to two major natural disasters and completing the largest acquisition in the history of the industry, we achieved year-over-year revenue growth of 31% and more than doubled earnings per share," said John Coyne, chief executive officer of WD.

Record Revenues, Record Profits and Record Shipments

For its fiscal year 2012, WD posted revenue of $12.5 billion and net income of $1.6 billion, or $6.58 per share for fiscal year 2012, compared to fiscal 2011 revenue of $9.5 billion and net income of $726 million, or $3.09 per share. The fiscal 2012 report includes results from the company’s newly acquired HGST subsidiary from the acquisition date of March 8 through the end of fiscal 2012.

For its fourth fiscal quarter ended June 29, 2012, the company reported revenue of $4.8 billion, hard-drive shipments of 71.0 million and net income of $745 million, or $2.87 per share. In the year-ago quarter, the company reported revenue of $2.4 billion, net income of $158 million, or $0.67 per share, and shipped 53.8 million hard drives.

“In the June quarter, demand was in line with our forecast as industry shipments reached 157 million units, bringing total HDD shipments for the year to 599 million units. Our WD and HGST subsidiaries both performed ahead of plan in Q4, delivering great products with consistent execution, resulting in strong revenue growth, gross margin and cash flows,” added Mr. Coyne.

WD Will Not Restore All Manufacturing Capacities

Even though Western Digital clearly returned its position as the world's largest maker of hard disk drives with 71 million units shipped, which is around five million more than Seagate supplied in approximately the same time frame, the company said it would not restore all of manufacturing capacities it and Hitachi GST owned before the flood given the current macroeconomic situation.

"We expect that we will not spend the full recovery capital that we indicated of $650 million now, because, obviously, we are not bringing the capacity back to the same level. We earmarked that number at about $400 million as oppose to the $650 million," said Wolfgang Nickl, chief financial officer of Western Digital, during a conference call with financial community.